The emergence of peer production and sharing in the networked information economy

Social sharing and exchange is becoming a common modality of producing valuable desiderata at the very core of the most advanced economies in information, culture, education, computation, and communications sectors. Free software, distributed computing, ad hoc mesh wireless networks, and other forms of peer production offer clear examples of such large-scale, measurably effective sharing practices.

I suggest that the highly distributed capital structure of contemporary communications and computation systems is largely responsible for the increased salience of social sharing as a modality of economic production in that environment. By lowering the capital costs required for effective individual action, these technologies have allowed various provisioning problems to be structured in forms amenable to decentralized production based on social relations, rather than through markets or hierarchies.

Once social production becomes technically feasible, it offers an alternative production modality, whose relative attractiveness, by comparison to markets, firms, and government provisioning can be analyzed in terms of comparative transaction costs and comparative information characteristics of each process. However, the broad term of peer production, or social production, covers different forms of motivation and organization. There are instrumental and non-instrumental motivations. There are more or less loosely organized platforms for cooperation.

Understanding how the motivational and organizational forms of this modality operate is important whether one seeks to engage in institutional design that takes into consideration the presence of social production as a potential source of welfare, or whether one is concerned with building a business model that harnesses the power of social production be it for-profit, like IBMs relationship with the GNU/Linux development community, or nonprofit, like NASAs relationship with the contributors to SETI@home.

We need to recognize that a broad set of social practices can be sustainable and efficient substitutes for markets, firms, and bureaucracies, and we need to begin to study how to make these new practices as effective as they can be.